The Nepal-China Railway

A Nepali delegation headed by Devendra Karki from the
Ministry of Physical Infrastructure and Transport went to Beijing between 17th
to the 23rd of June for a consultation meeting on the construction of the Kathmandu-Kerung
Railway. According to the department engineer Kiran Karki, the delegation had
been invited by the Chinese and were to discuss the Detailed Project Report (DPR)
further[1].
During these talks, China made it clear that it would not be willing to build
the railway linking Kerung to Kathmandu through a grant system under the BRI or
provide technical assistance free of cost[2]. The
Chinese officials cited that the rail link would, for the largest part, be
carried out on Nepali territory and hence would help Nepal’s economy alone.
Even from the feasibility report created by the Chinese side, the 72-kilometer
railway’s estimated cost is close to NPR 35 billion[3]. This
means that the Chinese authorities want Nepal to bear the cost on its own or
agree to take a massive amount of loans to build this railway. Thus the main
obstruction from the Nepali side for the Kerung-Kathmandu Railway comes from a
disagreement in the funding modality.

The Nepali Congress believes that if Nepal were to agree to
build the railway based on loans, Nepal would face a situation similar to the
Hambantota Port in Sri Lanka due to debt trap. On the other hand, the Nepal
Communist Party have shown a willingness to go ahead with the railway even
under the loan system. Despite the divide, the Nepali authorities could have
easily anticipated that it would be highly unlikely for China to build the
railway without any form of monetary or security gain. Furthermore, the railway
itself will go through some of the most inhospitable terrain and the
earthquake-prone Himalayan region making it vulnerable to disasters. It seems
as though the Nepali authorities overestimated a cursory agreement with the
Chinese to include the railway project under BRI. Instead, the process to obtain
a Kerung-Kathmandu railway remains rife with obstacles ranging from lack of
funds, to engineering challenges, and even geological risks. During the meeting
in Beijing, the Chinese officials even made it clear, the next discussion would
only be possible when Nepal hands over its own side of the feasibility report,
keeping in mind the security aspect and ecological balance.